San Francisco Paid Military Leave Act: Enforcement Guidelines Issued

In our client alert from December 29, 2022, O’Melveny reported on San Francisco’s first-of-its-kind paid military leave act for private employers: the Private Sector Military Leave Pay Protection Act (“MLPPA”). On January 20, 2023, San Francisco’s mayor approved this new law, and it became effective on February 19.

The San Francisco Office of Labor Standards Enforcement (“OLSE”) has now published guidance on compliance with the MLPPA. This guidance clarifies the reach of the statute, including:

• Who the MLPPA Applies To. The MLPPA does not apply to employers of fewer than 100 employees; does not apply to employees who work outside of San Francisco (including San Francisco International Airport); and does not apply to independent contractors. 
  
  
• Military Leave Coverage. The guidance confirms that the MLPPA can cover up to 30 separate military leave periods per year (up to 30 total days).
  
  
• Handbook and Employee Notice Requirements. If a covered employer “publishes an employee handbook that describes other kinds of leave available to its employees, the employer shall include a description of the rights to Supplemental Compensation under the MLPPA in the next edition of its handbook it publishes.” Further, all covered employers should provide notice to employees of their right to paid military leave “within a reasonable time” after the employee notifies the employer of “written military orders” that “will require time off from work.” 
  
  
• Calculating Supplemental Compensation for Servicemembers. Employers must provide employees the difference between their gross military pay and the gross pay they would have received had they worked their “regular work schedule.”
  
   – Gross military pay is only the employee’s basic pay rate, excluding military pay allowances for items like clothing or housing. Employers may calculate an employee’s gross military pay through the employee’s rank or request the employee provide a wage statement verifying the gross military pay. 
  
  – Gross “regular work schedule” pay includes wages for hours that would have been worked had the employee not gone on leave—including overtime, if the employee is “regularly” scheduled to work overtime. For those employees without a “regular” or fixed work schedule, employers must look at the pay received for 12 weeks immediately preceding the military leave (excluding those where the employee was on unpaid or partially paid leave). An employee must also receive all benefits they would have received if they worked their regular schedule—including health care, retirement, and profit sharing. Tips are not included in this gross pay.
  
  – The MLPPA does not permit employees to receive pay for hours when they would have been working outside of San Francisco or for hours when they would not have been required to work.

• Timing of Supplemental Compensation. Employers must make a good faith effort to pay employees their MLPPA compensation no later than the payday for the payroll period when the employee’s military leave began.
  
  
• Recordkeeping. Employers must keep records regarding employee schedules, hours worked, and military leave taken for up to four years.
  
  
• Advance Notice of Military Duty. Employers may require employees to comply with reasonable notice procedures—but only when the need for military duty is foreseeable. The guidance does not provide examples or further guidance on “reasonable” notice procedures.
  
  
• Collective Bargaining Agreements. The MLPPA applies to all covered employees, including those employees subject to a CBA. For a CBA to waive the provisions of the MLPPA, the waiver “must be express, and must be in clear and unambiguous terms.” 
  
  
• Penalties. The MLPPA’s robust administrative and civil enforcement provisions are not separately addressed in the OLSE’s guidance, but are set forth in the text of the MLPPA.  Under those provisions, the OLSE can order an employer who violates the law to pay up to (i) three times the amount of differential pay withheld or $250, whichever is greater; and (ii) up to $50 per day to employees for each day the compensation was withheld. Employees can also bring civil actions if they comply with certain administrative requirements and can obtain the same remedies, along with their attorneys’ fees.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Mark W. Robertson, an O'Melveny partner licensed to practice law in Alabama, California, New York, Texas, and the District of Columbia, Tristan Morales, an O’Melveny partner licensed to practice law in California and the District of Columbia, Charles J. Mahoney, an O'Melveny counsel licensed to practice law in New York, Aparna B. Joshi, an O’Melveny partner licensed to practice law in Illinois and the District of Columbia, Adam P. KohSweeney, an O’Melveny partner licensed to practice law in California and New York, Anton Metlitsky, an O’Melveny partner licensed to practice law in New York and the District of Columbia, Kristin MacDonnell, an O'Melveny counsel licensed to practice law in California, and Jason Zarrow, an O'Melveny counsel licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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